PERSONAL FINANCE

Some college grants on chopping block

When Marlene Christine Hurd was young, education wasn't her top priority. She dropped out of college and went to work.

Two decades later, a disability rendered her vocal chords nearly useless and forced her into early retirement from her job as a customer service representative at a call center.

Desperate to find a new way to make a living, Hurd turned to community college. Now 55, she is pursuing a degree in public administration and has made the dean's list. She owes it all, she says, to financial aid.

"It was my way to start over," she said. "Having the funding for school changed my life."

But Gov. Arnold Schwarzenegger's budget for the coming fiscal year would eliminate grants that go predominantly to students such as Hurd -- older, low-income, high-achieving adults returning to college to retool. The proposal is one of many program cuts offered by Schwarzenegger to close a yawning state budget deficit.

In addition to raising fees at public colleges and universities, the cuts would target a small part of the Cal Grant program, California's student-aid cornerstone.

The Cal Grant program provides as much as $11,259 in scholarship aid to each of the thousands of college students from poor and moderate-income families every year. The grants can be used to pay tuition, fees and room and board as well as to buy books and supplies.

For students who are just out of high school and meet the eligibility requirements -- a low-enough family income and assets and a high-enough grade point average -- the grants are largely assured. That would remain the case under the governor's budget, which allocates $800 million for these "entitlement" grants.

But older students such as Hurd, and those who miss the deadline for entitlement grants, must compete for a smaller pool of grants for which the state has been spending about $57 million a year. Only about 1 of every 6 eligible applicants for these so-called competitive grants gets one, according to the Institute for College Access and Success, a nonprofit advocacy group in Berkeley.

The governor's budget would halt the awarding of new competitive grants, although those who had already qualified would maintain their funding through four years of school, said H.D. Palmer, deputy director of the California Department of Finance.

The move would eliminate grants for 22,500 students in the fall.

The number of Cal Grant recipients at community colleges would plunge 45%, according to the institute.

The maximum award for a community college student is only $1,551 a year. But the money can make a huge difference for people who count their monthly income in the hundreds of dollars.

"It can pay the rent so I can go to school," Hurd said.

The typical recipient of a competitive grant is 30 years old and living on his or her own, according to an analysis of Cal Grant data by the Institute for College Access and Success. The typical recipient of an entitlement grant is 18 years old and living with his or her parents.

Competitive-grants recipients have on average a household income of $15,645, compared with nearly twice as much -- $29,011 -- for those getting entitlement grants.

And the older students tend to get better grades than the newer ones, the institute says.

"The grants that are on the chopping block help well-prepared older students return to college, strengthening their skills, employment prospects and incomes," the institute wrote in a recent report. "Even in the midst of the current state budget crisis, these cuts to the Cal Grant program are both unfair and unwise."

They also are necessary, Schwarzenegger said.

"The governor understands these cuts are difficult, but they are a necessary to bring state spending in line with revenue," said Sabrina Lockhart, the governor's deputy press secretary. "It also goes to show why the governor is pushing for budget reform, so that higher education is not subject to a roller coaster ride every time that state revenue dips."

Schwarzenegger wants to set up a reserve that could be funded in economic booms and tapped when times are tough, as they are now. It could cushion the effect of tight budgets on highly valued programs.

In the meantime, some older students may have to get by without a key source of funding.

"It may be the only means of support that students have to go back to school," Hurd said. "When you say, 'You can't get financial aid because we don't have the money,' where do those people go?"